This article first appeared on GuruFocus .
-
Loan Assets (AUM):INR3,684 crores as of September 30, 2026, up ~25% sequentially from INR2,946 crores in Q1 FY'27; first upward move after 10 quarters.
-
Loan Sanctions:INR3,098 crores net sanctions in Q2 FY'27 (gross sanctions INR3,355 crores), a 36-quarter high.
-
Disbursements:INR1,595 crores in Q2 FY'27, a 19-quarter high.
-
Total Income:INR114 crores for Q2 FY'27.
-
Profit After Tax:INR44 crores for Q2 FY'27.
-
Return on Assets:3.65% (annualized basis) in Q2 FY'27.
-
Return on Net Worth:5.64% (annualized basis) in Q2 FY'27.
-
Interest Spread:Improved to 1.18% in Q2 FY'27.
-
Gross Stage 3 Assets:Declined to INR126 crores from INR190 crores in Q1 FY'27.
-
Renewable Energy Portfolio:Increased ~45% during the quarter; renewables now ~45% of the loan book.
-
Liquidity:Positive cumulative net cash flow across all reported ALM maturity buckets; strong liquidity coverage ratio.
-
Funding:Fresh sanction of INR200 crores from Central Bank of India (new lender added); in-principle sanction from another bank expected to be formalized soon.
-
Warning! GuruFocus has detected 4 Warning Signs with BOM:533344.
-
Is BOM:533344 fairly valued? Test your thesis with our free DCF calculator.
Release Date: October 28, 2026
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
Positive Points
-
Loan assets returned to growth after 10 quarters, reaching INR3,684 crore, a 25% sequential increase, signaling a reversal of the declining trend.
-
Loan sanctions hit a 36-quarter high of INR3,355 crore (net INR3,098 crore) and disbursements reached a 19-quarter high of INR1,595 crore, demonstrating strong origination momentum.
-
Gross Stage 3 assets declined to INR126 crore from INR190 crore in the previous quarter, reflecting improved asset quality and balance sheet clean-up.
-
Interest spread improved to 1.18% during Q2 FY'27, and the company reported a healthy Return on Assets of 3.65% for the quarter.
-
Funding position strengthened with a fresh INR200 crore sanction from Central Bank of India (a new lender) and an in-principle approval from another bank, diversifying the funding base.
Negative Points
-
Net Stage 3 assets increased to INR105 crore from INR47 crore, as a large portion of the gross NPA reduction was due to a technical write-off (Danu Wind Parks) rather than cash recovery.
-
A pre-2020 road project (Kundli-Manesar) slipped into NPA during the quarter, requiring a provision of INR19 crore, indicating lingering asset quality risks from the legacy book.
-
The reported 25% loan growth is partly due to a low base, and H1 net loan book growth was flat as INR800 crore of repayments/prepayments offset disbursements.
-
Cost of borrowing remains high at over 9% (weighted average 9.27%), and the company is currently rated 'A', with credit rating improvement still pending.
-
Management indicated that spreads and leverage metrics may tighten in the near term as the company is in a portfolio-building phase, with optimum leverage of 4-4.5x only expected after 3-4 years.
Q & A Highlights
Q: Could you explain the impairment provision taken this quarter and the movement in gross and net Stage 3 assets? A: Dilip Srivastava (CFO) explained that the Kundli-Manesar road account slipped to NPA this quarter, and against an EAD of INR124 crores the company created a provision of INR19 crores. Sanjeev Kumar (Director of Operations) added that Stage 3 now comprises three assets Kundli-Manesar, Varam Bio (already provided for) and Danu Wind Parks, which was technically written off this quarter after being ~75% provided. Gross Stage 3 fell to INR126 crores from INR190 crores in Q1 FY'27.
Q: What is your loan book target for the end of this year and the next two to three years, given that H1 growth was flat after adjusting for repayments? A: Dilip Srivastava (CFO) said the company targets a net loan book of approximately INR5,000 crores by end of FY'27, considering fees and disbursements. Sanjeev Kumar (Director of Operations) noted that the 25% sequential growth came off a low base but was backed by over INR1,500 crores of disbursement the highest in several years and that most high-cost loan repayments have already occurred, so growth of at least 25% is expected in coming years.
Q: How do you view spreads and margins in a rising interest rate scenario, and what leverage and cost of borrowing do you expect? A: Sanjeev Kumar (Director of Operations) said the current high margins reflect a high equity base; as the book grows, leverage should reach an optimum of around four to four-and-a-half times over the next three to four years, with spreads not falling below 2%. Dilip Srivastava (CFO) added that a larger balance sheet should improve the credit rating and lower the cost of borrowing, with the company targeting market-competitive lending rates within about a year.
Q: What is the average borrower ticket size and average seasoning of the current loan book, and is a INR100150 crore ticket size too concentrated for an infrastructure lender? A: Sanjeev Kumar (Director of Operations) said the average ticket size is INR100150 crores and may rise to around INR150 crores by year-end, while average seasoning is about four years. He argued that infrastructure projects are inherently high-ticket, and that going for very low ticket sizes would mean lending to less reliable developers; the book remains far more granular than other market players.
Q: Why did net Stage 3 rise from INR47 crores to INR105 crores even as gross Stage 3 fell from INR190 crores to INR126 crores? A: Sanjeev Kumar (Director of Operations) explained that the Danu Wind Parks account was technically written off, removing it from both gross loans and provisions, leaving only two Stage 3 accounts Kundli-Manesar and a small INR2 crore account fully provided for. On Kundli-Manesar, 15% has been provided against the INR124 crore exposure versus the ~1012% required under IRAC norms, reflecting a conservative ECL methodology. Dilip Srivastava (CFO) noted the write-off is per RBI prudential norms and recovery efforts continue.
Q: What is the undisbursed sanctions pipeline, and does it support the INR5,000 crore target? A: Sanjeev Kumar (Director of Operations) said there is about INR2,500 crores of sanctioned but undisbursed portfolio awaiting compliance or project milestones, with fresh sanctions continuing every month. He clarified the INR5,000 crore target is a net balance sheet figure after accounting for prepayments.
Q: What recovery do you expect from Danu Wind Parks and by when? A: Sanjeev Kumar (Director of Operations) said the resolution is being pursued through the IBC process, with an application filed and hearings awaited for admission. Given it is an operating asset with good remaining PPA tenure and tariff, a substantial recovery is expected, though the realizable amount will depend on bids; recovery is likely in the next financial year.
Q: What are the expected repayments in H2 FY'27, and what is the gross Stage 2 position? A: Dilip Srivastava (CFO) said scheduled repayments in H2 are around INR300 crores, excluding unpredictable prepayments; H1 repayments were about INR248 crores. Sanjeev Kumar (Director of Operations) said Stage 2 largely relates to ILFS, with INR114 crores exposure of which INR65 crores has already been provided.
Q: What is the funding position, including new bank sanctions and liquidity? A: Sanjeev Kumar (Director of Operations) said Central Bank of India sanctioned INR200 crores, of which INR100 crores was drawn and utilized in September, and another bank has given in-principle approval for INR200 crores with the formal letter awaited. The company currently holds close to INR600 crores plus including SLR requirements. Dilip Srivastava (CFO) noted the fresh sanction also added a new bank to the lender base.
Q: What is the sector mix and borrower profile of the INR3,000 crores sanctioned this quarter? A: Rajiv Malhotra (MD & CEO) said the sanctions span renewable energy, roads, digital infrastructure and operating thermal, with ticket sizes ranging from INR50 crores to INR500 crores across roughly 15 borrowers. He declined to give average yields since most cases are not yet disbursed and are largely on floating rates.
Q: What is the ROA guidance for the full year, and what is the credit rating outlook? A: Sanjeev Kumar (Director of Operations) said Q2 ROA was 3.65% and H1 was 3.49%, with the full-year budget at 4.16% and expectations of exceeding current levels. On ratings, the company is currently at 'A' level and will approach rating agencies in the next quarter for an upgrade, with one agency review due first followed by the other.
Q: What is the status of the PTC stake divestment, and would the management consider a share buyback or dividend given the
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
